Gift and Estate Tax Compared: US, Canada and India Side by Side

Gift and estate tax compared across the three countries comes down to a single contrast: the U.S. taxes the giver and the estate, Canada taxes the capital gain that a gift or death triggers, and India taxes only certain receipts in the hands of the recipient. A family with parents in Pune, a sister in Mississauga and a household in Aurora can therefore move the same $100,000 in three different ways and end up with three different tax results, plus a different form for each. This page lays the rules side by side so you can plan before money or property moves.

Gift and estate tax compared: how does each country work?

How does the U.S. system work for families?

The IRS says the donor is generally responsible for paying gift tax, and the annual exclusion is $19,000 per recipient for both 2025 and 2026. A gift above that amount is reported on Form 709 and reduces the lifetime exemption, which the IRS sets at $15,000,000 for 2026 gifts under Public Law 119-21. For estates, the IRS lists a filing threshold of $13,990,000 for 2025 deaths and $15,000,000 for 2026 deaths, and unused exemption can pass to a surviving spouse through a timely filed return. A decedent who is neither a U.S. citizen nor domiciled in the U.S. is taxed only on U.S.-situs assets, with a $60,000 filing threshold, according to the Form 706-NA instructions. India is not on the IRS's list of death-tax treaty countries. A non-citizen spouse has a lower annual gift limit: $190,000 for 2025. See our US-India estate planning guide.

How does Canada treat gifts and death?

CRA's guidance says that if you give capital property to anyone other than your spouse, you are considered to have sold it at fair market value, so a taxable capital gain or allowable loss goes on your return. A gift to a spouse or common-law partner is generally a rollover at cost unless you elect out. At death, the CRA explains that the deceased is treated as having disposed of capital property immediately before death at fair market value, with the gain reported on the final return, and a rollover applies to property passing to a spouse who was a Canadian resident. The fair market value of an unmatured RRSP is included in the deceased's income unless the whole balance goes to a surviving spouse's registered plan within the allowed period. Estate administration costs such as probate fees are set by each province. Our Canadian capital gains guide has the detail.

How does India treat gifts and inheritance?

The Income Tax Department's guidance says a monetary gift is charged to tax in the recipient's hands if the total received in the year from non-relatives exceeds Rs 50,000, and then the whole amount is taxed. Immovable property received without consideration is taxed if its stamp duty value exceeds Rs 50,000. The listed exceptions include gifts from relatives (a spouse, siblings, spouse's siblings, parent's siblings, lineal ascendants and descendants, and certain spouses of those persons), gifts on the recipient's marriage, and money or property received under a will or by inheritance. The department says a gift of immovable property abroad is taxable on the same conditions. The Estate Duty Act, 1953 is repealed, so there is no death tax. State-level stamp duty and registration costs on property transfers still apply. Read our India gifts and inheritance guide.

Which reports follow a cross-border gift or inheritance?

For India-to-U.S. money movement, see India-U.S. remittances, gifts and LRS.

Worked example

The same $100,000 helps a daughter in three ways. (1) Her father in Aurora, a U.S. citizen, wires $100,000 to her in Pune: he files Form 709 because it exceeds $19,000; no gift tax is paid because it is covered by the lifetime exemption; she owes no Indian tax because her father is a relative. (2) Her uncle in Mississauga gives her $100,000 of shares that cost $40,000: he is treated as having sold them at fair market value, so he reports a $60,000 capital gain in Canada; she owes no Indian tax because her uncle is a relative (a brother of a parent). (3) Her friend in Pune gives her Rs 100,000: she pays Indian tax on the entire amount because the friend is not a relative and the total exceeds Rs 50,000. All figures are hypothetical.

Mistakes to avoid

• Assuming no gift tax means no filing. The U.S. donor still files Form 709, and the recipient may file Form 3520.
• Gifting appreciated Canadian shares to family without costing the capital gain.
• Forgetting that an Indian gift from a friend is taxable to the recipient.
• Treating the U.S. lifetime exemption as permanent. The IRS publishes it by year.
• Planning an Indian property gift without allowing for stamp duty and FEMA rules.

How we can help

We analyse gift and estate exposure on the U.S. side from our Aurora, Illinois area base, prepare Forms 709, 706, 706-NA and 3520, and coordinate with your Canadian CPA and Indian Chartered Accountant, plus your estate attorney, so a gift or bequest is reported correctly in each country. See our cross-border tax service and relocation and immigration tax planning. This is not legal advice.

Frequently asked questions

General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.